alleryStart learning →The payback period is described as something to consider when making which decision?
AA capital budget decision
BA payroll timing decision
CA tax filing decision
DAn audit scope decision
Answer & Solution
Correct answer: A. A capital budget decision
1. The payback period has a specific decision context.
2. Capital budgeting compares projects against each other.
3. One way to focus on this is to consider the payback period.
4. That is when making a capital budget decision.
_Source: OpenStax Principles of Accounting, Volume 2: Managerial Accounting (CC BY-NC-SA 4.0), Ch 11 'Capital Budgeting Decisions'_
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Related questions
Complete the capital budgeting rulesMatch each capital budgeting methodStack the capital budgeting termsSort the capital budgeting methodsPull the rope to the right method familyChoosing a project on payback alone risks favouring one that repays quickly but earns:Of the four named methods, how many account for the time value of money?The payback method's focus on recouping an investment makes it primarily a measure of: